SP OKs 45 bank branch-lite units

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has approved the establishment of 45 branch-lite units of big and small banks nationwide as part of efforts to promote financial inclusion.

“So far, 45 branch-lite units have been approved,” BSP Deputy Governor Chuchi Fonacier said.

She said majority of the branch-lite units approved were from CARD Bank Inc.

Likewise, Fonacier said CARD Bank has converted 752 other banking offices (OBOs) into branch-lite units.

CARD Bank has disbursed P8.11 billion worth of loans to 1.03 million borrowers as of end-April. The bank has a repayment rate of 99.39 percent.

A branch-lite unit refers to any permanent office or place of business of a bank, other than its head office or a branch. A branch-lite unit performs limited banking activities and records its transactions in the books of the head office or branch.

It may perform activities and provide any of the products and services that a branch may perform or provide except those suited only to sophisticated clients with aggressive risk tolerance.

Last December, the central bank approved the branch-lite concept instead of the capital-intensive brick-and-mortar branches to allow banks to design offices aimed at the lower-income segments as part of the central bank’s liberalization initiatives.

The concept would help banks become more responsive to the changing preferences of financial consumers and market conditions.

The BSP currently allows banks to set up branches, together with extension offices, other banking offices, and microfinance units, subject to capitalization and documentary requirements.

Latest data showed there are 571 cities and municipalities in the Philippines that remain underserved or unbanked.